Veterans deal with financial learning curve

The younger veterans usually need a “financial action plan,” with attainable goals and advice from pros.

In the military, your salary is simple, based on rank, time in service and special skills such as parachuters getting ‘jump pay,’ In the civilian world, you negotiate. Then, unlike the military, where it’s public knowledge, your salary is now a big secret.—John Phillips, Author

When he retired from the Marine Corps in May and became a manager for a defense contractor, Col. Mark Desens knew he was entering new territory in many ways.

In corporate America, everything from resumes to management styles is different, he said. Personal finances, especially, require some homework.

“I’m really fortunate to have a pension, the (military retirees’) Tricare health insurance and to land a job through the wife of a fellow officer,” said Desens, 51. “But I still have a lot to sort through.”

Desens is debating: Should I get a dental insurance policy? Will my salary make up for the allowances (such as housing) I received while in the service? How should I shelter my savings from taxes? Should I enroll in my employer’s 401(k)? Should I get an individual retirement account too? Do I need long-term-care insurance?

The learning curve is even greater for younger veterans, said Mechel Lashawn Glass, who co-wrote “The Veteran’s Money Book” after shifting from a 17-year-old enlistee to a 22-year-old veteran to a 43-year-old professional financial counselor.

Though being in the service gave her maturity and confidence, Glass said, she was a “financial illiterate in debt” when she left.

“In the service, you’re isolated,” said Glass, a resident of Fayetteville, Ga. “Especially if you live on a base, the government provides your housing, phone, utilities, vehicle, clothes, health care, insurance, even your gym. It gives you a steady paycheck. You come home, and you have to do all this yourself. You have to learn the financial basics that your nonveteran friends learned while you were gone.”

When Glass moved home to her mother’s house, she reacted by crawling into a shell.

“I was just existing, not looking forward,” she said. “My wake-up call was when my mom told me I had six weeks to find my own place. That forced me to learn the difference between ‘wants’ and ‘needs,’ make a budget and plan.”

Especially if they have been overseas, some veterans return to a financial reality check, Glass added.

“I talk to vets who don’t even realize how bad the economy is,” she said. “In addition to not having personal finance skills, they’re not prepared to compete for a job in today’s competitive market.”

Desens is ahead of younger veterans because he already owns a home and car. He knows his financial goals — to retire and afford future health care expenses for himself and his wife.

The younger veterans, Glass said, usually need a “financial action plan,” with attainable goals and advice from pros.

“A financial adviser can explain, for example, why you need to establish credit,” Glass said. “It’s not just about getting loans for a home or car, but also because nowadays, employers check your credit too.”

“Be proud of your service, but put it behind you,” Phillips said. “You’re a civilian now, and there’s a huge support system out there to help you.”

After retiring from the Army 15 years ago, Phillips landed a job as a finance director for Coca-Cola.

Many veterans need help looking ahead, Glass said. “In the service, the message is — when you get a break, you go to the bar, cut loose and have fun,” she said. “So you just live for today. Now, you have to think about supporting your family and being able to retire.”

In their books, Phillips and Glass list state, federal and private groups that walk vets through financial planning. They define basic insurance terms that are gibberish to many vets, Phillips said, especially younger ones who counted on their parents to handle such matters before they enlisted.

Phillips’ book explains private sector salaries and negotiations.

“In the military, your salary is simple, based on rank, time in service and special skills such as parachuters getting ‘jump pay,’” he said. “In the civilian world, you negotiate. Then, unlike the military, where it’s public knowledge, your salary is now a big secret.”

Phillips also defines “benefits.” “In the military, they’re all the same — vanilla — but paid for,” Phillips said. “In the service, you can take your base salary and basically double it when it comes to all the benefits you get. But in the civilian world, you pay for things like health care yourself. Veterans have to budget for that.”

The authors urge vets without college degrees to take advantage of the GI Bill, which provides free tuition, plus living allowances.

“The post-9/11 GI Bill extends benefits to dependents too,” Phillips said. “More and more, colleges and universities have veteran service centers. That’s a good place to start asking questions.”

Many groups pave the way for veterans who want to become homeowners. Through “VA loans,” the Department of Veterans Affairs guarantees part of mortgages from private lenders, so vets get lower interest rates.

The Yellow Ribbon Registry Network ( www.yrrn.org ) matches donations to vets having a hard time making ends meet. Through USACares (usacares.org), donors help cover vets’ lost wages.

USAA (usaa.com) is the AARP of vets’ services, with discounts on insurance, credit cards, banking, travel and products from engagement rings to home-security systems.

State departments of veterans’ services provide an array of financial perks, from free fishing licenses to property tax exemptions to income tax credits. See their websites for details, because they vary from state to state.

One of the upsides of being a vet, Phillips said, is having a government-issued Veterans Identification Card, which is your ticket to discounts with retailers, restaurants, insurance companies, mortgage lenders, and state and federal services.

“I carry mine everywhere, especially Home Depot, where I get a discount,” he said. “I got my license plate for only $10 and my driver’s license for free. I saved $700 on my car insurance. It’s like getting senior discounts — they’re out there, but you have to remember to ask.”

But the veteran’s greatest asset is intangible, Phillips said.

“You’ve learned to look at the problem and find a solution,” he said. “So you don’t know how to get car insurance? You’ve survived dangerous situations. You can figure this out.”